An open-end fund has a net asset value of $11.40 per share. It is sold with a front-end load of 7%. What is the offering price? (Round your answer to 2 decimal places.)
| Offering price | $ |
Explanation:
|
The
offering price includes a 7% front-end load, or sales commission,
meaning that every dollar paid results in only $0.93 going toward the
purchase of shares. Therefore:
|
| Offering price = |
NAV
| = |
$11.40
| = $12.26 | |
| 1 − load | 1 − 0.07 | ||||
No comments:
Post a Comment